FDI net inflows up by 23% in March

By Anna Leah Gonzales

June 10, 2024, 5:17 pm

MANILA – Foreign direct investments (FDI) net inflows went up by 23.1 percent in March this year, the Bangko Sentral ng Pilipinas (BSP) said on Monday.

In a report, the BSP said FDI net inflows during the month reached USD686 million from USD557 million net inflows in the same month last year.

"The expansion in FDI net inflows was driven mainly by nonresidents’ net investments in debt instruments, which grew by 19.0 percent year-on-year to USD465 million from USD391 million in March 2023," the BSP said.

Nonresidents’ net investments in equity capital also grew by 67.1 percent from USD94 million to USD157 million.

Reinvestment of earnings, however, declined by 11.3 percent to USD64 million in March 2024 from USD72 million in March 2023.

FDIs include investment by a nonresident direct investor in a resident enterprise, whose equity capital in the latter is at least 10 percent, and investment made by a nonresident subsidiary or associate in its resident direct investor.

The FDI could be in the form of equity capital, reinvestment of earnings, and borrowings.

The central bank said equity capital placements during the month mostly came from Japan, Singapore, and the United States and were invested in manufacturing, financial and insurance, and real estate industries.

For the first three months of the year, FDI net inflows grew by 42.1 percent to USD3.0 billion from USD2.1 billion in the first quarter of 2023.

"FDI increased during the quarter on the back of the country’s strong growth prospects and moderating inflation," the BSP said.

The Netherlands and Japan were the top sources of FDI in the first quarter of the year.

Preferred investment destination

For his part, Department of Trade and Industry (DTI) Secretary Alfredo Pascual said the strong FDI net inflows in the first quarter of 2024 highlights the confidence that the Philippines is a preferred investment destination for global companies.

He added that the increase in investments in various sectors underscores the country’s dynamic economic landscape and strategic potential.

“The significant increase in equity capital from key partners like Japan, Singapore, and the United States reflects strengthened bilateral relations and continued economic opportunities,” Pascual said.

“The positive trends follow our investment promotion efforts in these countries, among others. These engagements have been pivotal in bolstering investor confidence and forging stronger economic partnerships,” the top trade official added.

Pascual said as the government prioritizes infrastructure development, economic stability, and investor-friendly reforms, these initiatives will help the Philippines to have an environment conducive to long-term investments and sustainable growth.

“Our goal is to ensure that investment inflows translate into meaningful economic opportunities and improved quality of life for all Filipinos,” he said. (With reports from Kris Crismundo/PNA)